Tue, Dec 8, 2020
Duff & Phelps has launched a new report titled, Measuring Their Shot: A Study of Professional Golfers’ Future Career Value, a first-of-its-kind ranking of male professional golfers by their expected future earnings. The study evaluated over 1,000 professional golfers and ranked the top 60 current players based on their Future Career Value (FCV). The golfers’ FCV reflects the present value of their projected tour winnings and endorsement income over their remaining professional golf careers through the age of 50. See the Future Career Value Leaderboard below.
We wanted to explore whether the principles of valuation could be applied to professional golf careers, to look beyond current and historical player rankings and create an alternate measure based on potential future performance.
While no one can predict the future, using valuation and mathematical modeling principles, one can gain insight into the potential path on which a player’s career might unfold.
We started by looking at historical careers of male professional golfers. We created a set of comparable players from which we could estimate current pro golfers’ performance, similar to how comparable companies are used in the market approach to valuing businesses.
We created a database of over 1,000 professional golfers using data from 1996 and beyond, which established a historical relationship between a player’s age and his OWGR. The dataset gave us an array of historical career paths, helping us find comparable players who most closely matched current professionals (subject players) based on career progression through their current age. Based on statistical similarities, we identified 10 comparable players unique to each golfer in our study to model the remainder of a subject player’s career path.
We knew there would be limitations and constraints, like not having access to all the data needed to measure the true brand value for each player. So, we designed a forward-looking analysis that allowed us to rank players based on specified parameters:
There were some notable performances in this year’s Masters Tournament. With Dustin Johnson now wearing the green jacket and seven of the 12 players who finished in the top ten (including ties) appearing in the top 11 of our leaderboard, it will be interesting to see how their values grow in the years to come.
Download the full report here. We hope you find it fun and interesting to explore and look forward to your feedback at the clubhouse and on the green.
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